US: CBO Estimates Tariffs Could Reduce Deficit By USD$4T Over 10 Year

The Congressional Budget Office has issued a statement updating its estimate for the deficit implications of President Donald Trump's tariff policies. The CBO estimates that "changes in tariffs will reduce total deficits by $4.0 trillion altogether," over ten years. 

• The CBO notes: "Because of recent changes in tariffs, those estimates are larger than the $2.5 trillion decrease in primary deficits and $0.5 trillion reduction in interest outlays that we projected in early June in a report that examined the effects of the tariffs implemented between January 6 and May 13, 2025."
• The CBO cautions in a rundown of its methodology that the ad hoc nature of tariff implementation makes forecast modeling difficult: "When the Administration modifies tariffs through an administrative action, we assume that the tariffs then in effect will continue permanently without changes. ... Thus, our projection of revenues from tariffs in effect as of August 19, 2025, does not include the changes in tariff rates announced in an August 21 joint statement with the European Union, the scheduled August 27 increase in the tariff rate on imports from India (by an additional 25 percent), or the August 29 suspension of duty-free entry for commercial shipments of less than $800."